Exhibit 10.1
March 3, 2006
AMCON Distributing Company
0000 Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
And
Xxxxxxxxxx Natural Foods, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxx 00000
And
Hawaiian Natural Water Company, Inc.
00-000 Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxx 00000
And
Health Food Associates, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
And
Trinity Springs, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
Re: Sixth Amendment to Amended and Restated Loan and Security Agreement
(this "Amendment")
Gentlemen:
AMCON Distributing Company, a Delaware corporation, ("AMCON"), Xxxxxxxxxx
Natural Foods, Inc., a Florida corporation, ("Xxxxxxxxxx Natural"), Hawaiian
Natural Water Company, Inc., a Delaware corporation, ("Hawaiian Natural"),
Health Food Associates, Inc., an Oklahoma corporation, ("Health Food"), and
Trinity Springs, Inc., a Delaware corporation, ("Trinity Springs"), (AMCON,
Xxxxxxxxxx Natural, Hawaiian Natural, Health Food, and Trinity Springs are
each referred to as a "Borrower" and are collectively referred to as
"Borrowers") and LaSalle Bank National Association, a national banking
association (in its individual capacity, "LaSalle"), as agent (in such
capacity as agent, "Agent") for itself, Gold Bank, a Kansas state bank, and
all other lenders from time to time party to the Loan Agreement referred to
below ("Lenders"), have entered into that certain Amended and Restated Loan
and Security Agreement dated September 30, 2004 (the "Loan Agreement"). From
time to time thereafter, Borrowers, Agent and Lenders may have executed
various amendments (each an "Amendment" and collectively the "Amendments") to
the Loan Agreement (the Loan Agreement and the Amendments hereinafter are
referred to, collectively, as the "Agreement"). Borrowers, Agent and Lenders
now desire to further amend the Agreement as provided herein, subject to the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
1. The Agreement hereby is amended as follows:
a. Subsection 1 of the Agreement is amended by adding thereto in
alphabetical order the following definition of "Excess Availability":
"Excess Availability" shall mean, as of any date of determination
by Agent, the excess, if any, of the lesser of (i) the Maximum Revolving Loan
Limit less the sum of the outstanding Revolving Loans and Letter of Credit
Obligations and (ii) the Revolving Loan Limit less the sum of the outstanding
Revolving Loans and Letter of Credit Obligations, in each case as of the
close of business on such date and assuming, for purposes of calculation,
that all accounts payable which remain unpaid more than thirty (30) days
after the due dates thereof as the close of business on such date are treated
as additional Revolving Loans outstanding on such date.
b. Subsection 13(d) of the Agreement is amended and restated in full,
to read as follows:
(d) Mergers, Sales, Acquisitions, Subsidiaries and Other
Transactions Outside the Ordinary Course of Business.
No Borrower shall (i) enter into any merger or consolidation; (ii)
change its state of organization or enter into any transaction which has the
effect of changing its state of organization; (iii) sell, lease or otherwise
dispose of any of its assets other than in the ordinary course of business,
provided that AMCON may sell and dispose of assets with a value of less than
$250,000.00 in any transaction, or series of related transactions, provided
that the proceeds thereof, net of reasonable out of pocket disposition
expenses, are applied to the Liabilities; (iv) purchase the stock, other
equity interests or all or a material portion of the assets of any Person or
division of such Person; or (v) enter into any other transaction outside the
ordinary course of such Borrower's business, including, without limitation,
any issuance of any shares of, or warrants or other rights to receive or
purchase any shares of, any class of its stock or any other equity interest
other than (I) such issuances pursuant to the terms of such Borrower's stock
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option plan, (II) the issuance by AMCON of Series B Preferred Stock so long
as the entire proceeds thereof are used to repay the existing subordinated
indebtedness of AMCON, and (III) the issuance by AMCON of 80,000 shares of
Series C Convertible Preferred Stock to Draupnir Capital, LLC ("Draupnir")
pursuant to that certain Securities Purchase Agreement dated as of March 3,
2006 between AMCON and Draupnir so long as the entire proceeds thereof are
used to pay the Revolving Loans. Notwithstanding anything in this Agreement
to the contrary, no Borrower shall redeem, retire, purchase or otherwise
acquire any shares of any class or series of its stock or any other equity
interest (including, without limitation, any shares of AMCON's Series A
Preferred Stock, Series B Preferred Stock or Series C Convertible Preferred
Stock); provided, however, that (i) AMCON may redeem odd lot stock (other
than AMCON's Series C Convertible Preferred Stock) in an aggregate amount not
to exceed $50,000.00 in any calendar year and other stock (other than AMCON's
Series C Convertible Preferred Stock) up to $100,000.00 in the aggregate
during any calendar year, and (ii) AMCON may redeem shares of AMCON's Series
C Convertible Preferred Stock only so long as (I) no Event of Default is in
existence at the time of, or would occur after giving effect to, any such
redemption, and (II) Borrowers shall have Excess Availability of not less
than Two Million Dollars ($2,000,000.00) after giving effect to any such
redemption. No Borrower shall form any Subsidiaries or enter into any joint
ventures or partnerships with any other Person.
c. Subsection 13(e) of the Agreement is amended and restated in full,
to read as follows:
(e) Dividends and Distributions.
No Borrower shall declare or pay any dividend or other distribution
(whether in cash or in kind) on any class of its stock (if such Borrower is a
corporation) or on account of any equity interest in such Borrower (if such
Borrower is a partnership, limited liability company or other type of
entity). Notwithstanding the foregoing and provided that (i) each such
dividend payment is permitted under all applicable laws; and (ii) no Event of
Default shall have occurred prior to, or would occur as a result of, any such
dividend payment, AMCON may pay the regularly scheduled dividends on its (w)
Common Stock in an aggregate amount not to exceed $.72 per share in any
Fiscal Year, (x) Series A Preferred Stock in accordance with the terms of
such stock in an aggregate amount not to exceed $172,000 in any Fiscal Year,
(y) Series B Preferred Stock in accordance with the terms of such stock in an
aggregate amount not to exceed $140,000 in any Fiscal Year, and (z) Series C
Convertible Preferred Stock in accordance with the terms of the Series C
Certificate of Designations (as defined below) in an aggregate amount not to
exceed $120,000 in any Fiscal Year. Without limitation of the foregoing,
AMCON hereby agrees not to accelerate, increase or prepay said dividends with
respect to its Series A Preferred Stock, Series B Preferred Stock or Series C
Convertible Preferred Stock.
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d. Subsection 13(g) of the Agreement is amended and restated in full,
to read as follows:
(g) Fundamental Changes, Line of Business.
Except for the filing by AMCON of (i) a Certificate of Designation
for the Series B Preferred Stock and any restatements and amendments to
AMCON's certificate of incorporation to physically reflect the Certificates
of Designation for the Series A Preferred Stock and the Series B Preferred
Stock, and (ii) a Certificate of Designations, Preferences and Rights of
Series C Convertible Preferred Stock of AMCON dated as of March 3, 2006 (the
"Series C Certificate of Designations") and any restatements and amendments
to AMCON's certificate of incorporation to physically reflect the Series C
Certificate of Designations for the Series C Convertible Preferred Stock, no
Borrower shall amend its organizational documents or change its Fiscal Year
or enter into a new line of business materially different from such
Borrower's current business.
2. This Amendment shall not become effective until each of the following
conditions precedent has been satisfied:
a. Agent shall have received this Amendment, duly executed by the
parties hereto;
b. Agent shall have received a true, correct and complete copy of that
certain Securities Purchase Agreement dated as of March 3, 2006 between AMCON
and Draupnir Capital, LLC (the "Securities Purchase Agreement"), together
with all exhibits and schedules thereto, all in form and substance
satisfactory to Agent, duly executed by the parties thereto, certified by an
officer of AMCON; and
c. Agent shall have received from AMCON to pay the Revolving Loans all
of the proceeds from the issuance and sale by AMCON of shares of Series C
Convertible Preferred Stock pursuant to the Securities Purchase Agreement and
such proceeds shall have been no less than $2,000,000.00.
3. The representations and warranties set forth in Section 11 of the
Agreement shall be deemed remade as of the date hereof by each Borrower,
except that any and all references to the Agreement in such representations
and warranties shall be deemed to include this Amendment. No Event of
Default has occurred and is continuing and no event has occurred and is
continuing which, with the lapse of time, the giving of notice, or both,
would constitute an Event of Default under the Agreement.
4. Borrowers agree to pay on demand all costs and expenses of or incurred
by Agent (including, but not limited to, legal fees and expenses) in
connection with the negotiation, preparation, execution and delivery of this
Amendment.
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5. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
6. Except as expressly amended hereby, the Agreement and the Other
Agreements are hereby ratified and confirmed by the parties hereto and remain
in full force and effect in accordance with the terms thereof. Each Borrower
hereby reaffirms its grant of the security interest in the Collateral.
7. This Amendment shall be governed by and construed under the laws of the
State of Illinois, without regard to conflict of laws principles of such
State.
LASALLE BANK NATIONAL ASSOCIATION,
a national banking association,
as Agent and a Lender
By: /s/ Xxxxxxxx Xxxxx
------------------
Xxxxxxx Xxxxx
Title: Sr. Vice President
GOLD BANK,
a Kansas state bank,
as a Lender
By: /s/ Xxxx Xxxxxxxx
-----------------
Xxxx Xxxxxxxx
Title: Vice President
ACKNOWLEDGED AND AGREED TO this 3rd day of March, 2006:
AMCON DISTRIBUTING COMPANY
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Title: Vice President and Chief Financial Officer
HAWAIIAN NATURAL WATER COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Title: Secretary
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XXXXXXXXXX NATURAL FOODS, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Title: Secretary
HEALTH FOOD ASSOCIATES, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Title: Secretary
TRINITY SPRINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Title: Asst. Secretary
Consented and agreed to by the following guarantor(s) of the obligations of
AMCON DISTRIBUTING COMPANY, HAWAIIAN NATURAL WATER COMPANY, INC., XXXXXXXXXX
NATURAL FOODS, INC., and HEALTH FOOD ASSOCIATES, INC. to LaSalle Bank
National Association, as Agent.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx
Date: March 3, 2006
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